Sungevity’s messy solar bankruptcy leaves customers on the hook

A Sungevity crew installs solar panels on the roof of a home in San Francisco on May 14, 2009.

Photo: Hardy Wilson, The Chronicle

In late February, during a break in the rain, Franck Juvin-Acker had solar panels installed on the roof of his San Diego County home, working with Oakland’s Sungevity.

Then on March 13, Sungevity filed for Chapter 11 bankruptcy protection.

Now, the contractor who installed the panels on Sungevity’s behalf has slapped a lien on Juvin-Acker’s home, saying Sungevity never paid him.

“Sungevity called me back at one point and said, ‘Yeah, yeah, don’t worry about it,’” said Juvin-Acker, 37, a senior global product manager for the Nixon watch company. “But they’re going bankrupt, so it’s hard not to worry.”

By their nature, bankruptcy proceedings often leave a company’s contractors, partners and ex-employees feeling burned. But Sungevity’s sudden plunge, which came after the company’s plans to go public last year fizzled, caught many employees off-guard and left some customers — many of whom lined up financing through the company — in difficult situations.

A Sungevity worker installs solar panels in San Francisco.

Photo: Hardy Wilson, The Chronicle

Juvin-Acker, for example, financed the nearly $26,000 installation with a loan from Mosaic, an Oakland solar financing company that often worked with Sungevity. Mosaic, he said, told him the company had already forwarded 80 percent of the money to Sungevity, which should have used that cash to pay the contractor, American Energy.

Now, in addition to the lien on his Vista home, he also has to pay Mosaic $189.54 per month on the loan.

“Sungevity kept the money and didn’t pay the contractor,” Juvin-Acker said. A Sungevity spokesman declined to comment on Juvin-Acker’s dilemma, and Mosaic did not reply to several requests for comment.

Noel Cajudo paid Sungevity roughly half of the cost of his $24,000 rooftop solar array in January, with the money coming out of his own pocket. Installation was scheduled for February, then delayed. Then the bankruptcy filing hit.

In late March, his project coordinator at Sungevity called him and said the company was in the midst of a reorganization. But, the coordinator said, a contractor might be able to install the array by the end of March. Cajudo told him that if the company couldn’t meet that deadline, he wanted his money back.

He still doesn’t have his panels, or his refund.

“I said, ‘I know what restructuring means, I know you filed for bankruptcy, I’m glad you weren’t laid off, but you’ve got more than $12,000 of my money,’” said Cajudo, 48, who lives in Menifee (Riverside County). “He told me everything’s going to be good, the company’s going to come back. But at that point, I had no confidence in them at all.”

Sungevity has tried to reassure customers that the company will not vanish.

Since the day it filed for Chapter 11, the company has insisted that it plans to recapitalize its operations and carry on. Sungevity reached a tentative deal with a group of investors, led by Northern Pacific Group, to purchase most of its assets for $50 million. An effort to solicit competing offers failed to attract qualified bidders. A Bankruptcy Court judge could rule on the proposed sale Monday.

“Sungevity is not shutting down any of its operations,” the company wrote in a March 29 blog post addressed to its customers. “During this process, our team will remain committed to serving our customers and delivering our industry leading service.”

Some customers and ex-employees have doubts.

Sean Moses, a residential project manager for Sungevity, said company executives held a meeting with employees early this year and gave no hint of the trouble ahead.

“It was all painted as sunshine and roses,” said Moses, 33. Then on March 9, he and more than 300 of his colleagues were laid off.

“I think everyone was pretty blindsided by it,” Moses said.

He received a FedEx delivery at his home in Oakland that included a note telling him he was no longer employed at Sungevity, along with his final paycheck.

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In addition, the Outten & Golden law firm has filed a class-action complaint in the bankruptcy proceedings, claiming Sungevity violated state and federal labor laws that require advance warning of large-scale layoffs. The employees fired on March 9 are owed 60 days of wages and benefits, as well as accrued vacation pay, according to the complaint.

Law firm partner Jack Raisner said the complaint covers 330 to 335 former Sungevity employees.

Sungevity blamed the bounced checks on a mistake by the company’s bank. Spokesman John Ordoña said Thursday that all of the affected employees should receive either direct deposits to their bank accounts or new checks by the next day. Employee wages generally receive priority over other debts in bankruptcy.

Moses, who spent more than three years at Sungevity, believes in solar power and would like to find another job in the field. He finally received his last two weeks of pay. But he’s doubtful his former company will survive.

“They’re going to play like all’s well and good until the dirt’s thrown on the grave,” he said.

David Baker covers energy, clean tech, electric vehicles and self-driving cars for the San Francisco Chronicle. He joined the paper in 2000 after spending five years in Southern California reporting for the Los Angeles Times and the Daily News of Los Angeles. He has reported from wind farms, geothermal fields, solar power plants, oil fields and an offshore drilling rig in the Gulf of Mexico. He also visited Baghdad and Basra in 2003 to write about Iraq's reconstruction. He graduated from Amherst College and the Columbia University Graduate School of Journalism. He lives in San Francisco with his wife.